Banking redundancies near 60,000 as UBS axes 3500

Tuesday 23 August 2011 06:43 BST

The total number of job cuts by the world's top 50 banks rolled towards 60,000 today as UBS finally said it will cut 3500 posts by the end of 2013.

The Swiss bank had resisted saying how many jobs it would axe when it was forced last month to drop its target of Swfr15 billion (£11.5 billion) profits in 2014. UBS was Europe's worst hit bank during the financial crisis shedding more than 18,000 jobs as it took writedowns and losses of more than Swfr45 billion in 2008.

The bank is now trying to achieve cost savings of Swfr2 billion a year by the end of 2013.

UBS has just above 6800 employees in the UK most of whom are in investment banking and wealth management - due to be the hardest-hit divisions.

The bank said the job cull would have to involve redundancies.

Almost 1600 of the posts being axed are in investment banking much of which is based in London. A further 1200 jobs will be lost in the wealth management division and the rest from asset management and the US wealth divisions.

UBS said it expected to take a one-off hit of Swfr 550 million to cover redundancy and other restructuring costs most of which will be charged in the second half of this year.

At the time of UBS's first results last month UBS chief executive Oswald Grübel took a pot shot at George Osborne's bank levy - introduced in the last Budget - saying that it could reduce the investment banking arm's profit by Swfr100 million in the second half. The levy, which replaced the one-off bankers bonus tax, is aimed at raising £2.5 billion a year based on banks' non-retail assets.

UBS profits after tax in the first six months almost halved from Swfr2.01 billion to Swfr1.02 billion, with the investment bank's pre-tax profits plunging from Swfr1.31 billion to Swfr376 million in the second quarter.

Today's cuts represent 5% of UBS total workforce of 65,000. On that basis just over 300 redundancies could happen in London.